This graph shows monthly real PCE since Q4 2009. the dashed red lines are the quarterly PCE (note: left scale doesn't start at zero to show the change).

Using the two-month method to estimate PCE, it looks like real PCE growth will be about 2.0% annualized Q3 2010 - or about the same as in the previous two quarters.

This month the saving rate increased slightly ...

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the July Personal Income report. The saving rate increased to 5.8% in August from 5.7% in July.

I expect the saving rate to rise further - perhaps to 8% or more.

The key in this report is that PCE growth in Q3 will probably be around 2.0% - barring a significant change in September. This suggests sluggish GDP growth in Q3.